Universal Credit Algorithm ‘Pushing People into Debt and Distress’

September 29, 2020

An algorithm central to the functioning of the Universal Credit benefits system is having the effect of pushing people across the UK into financial hardship and debt, according to a new report on the subject.

The advocacy organisation Human Rights Watch (HRW) has published an in-depth report insisting that some of the technology underlying the Universal Credit system is to blame for a lot of the negative outcomes it produces.

“The government has put a flawed algorithm in charge of deciding how much money to give people to pay rent and feed their families,” said Amos Toh, a senior human rights and artificial intelligence researcher from HRW.

According to Mr Toh and his colleagues, the government’s bid to automate key aspects of the country’s benefits system has had the effect of “pushing people to the brink of poverty” and seen them “fall into debt” in significant numbers.

When Universal Credit was first created in 2013, the stated goal was to streamline and simplify the processes involved in administering state benefits but HRW is convinced that key aspects of the system are not working as intended.

“Human Rights Watch has found that the means-tested algorithm at the heart of Universal Credit is flawed,” the organisation has said.

Amounts of money paid to Universal Credit claimants vary depending on a variety of factors, with the system’s central algorithm designed to adjust to changes in earnings among applicants.

But the research carried out by HRW suggests that the system routinely overestimates how much money people are earning and shrinks their payments in ways that leave them struggling to make ends meet.

Financial hardship and an extra reliance on debt is also common among Universal Credit claimants who lack digital skills or who find it difficult or impossible to access a reliable internet connection.

Responding to HRW’s 68-page report looking into the effectiveness and failings of the Universal Credit system, Citizens Advice’s chief executive Dame Gillian Guy described the benefit as a “lifeline for millions” but agreed it does still need to improve.

“Those in irregular work can find themselves struggling to budget from month to month, while new claimants risk facing hardship or debt while they wait for a first payment,” she said.

“With the potential for a fresh avalanche of job losses this winter, it’s critical the government further strengthens the safety net.”

Paul Barber

Head Adviser at our Manchester Office

Tel: 0800 001 4247
Email: enquiries@ukdebt.org.uk

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